Q: Can I avoid cap gains tax from a commercial property if I get a commitment letter of purchase for a new rental? Stocks?
I just sold my portion of a family business (commercial real-estate that had rental income) back to my family who held the mortgage. I understand I need to purchase like property to avoid cap gains tax. If I cannot close in the 60 days can I get a commitment letter? Can I use a portion for stocks and pay the cap gains on that portion only? I am thinking of purchasing a home or condo to rent to the public. Does it have to be a commercial property? Does it matter how much I use for the property? I assume the stocks investment would not help avoid cap gains?
A:
The answers to your questions depend on very specific facts that are not provided here, such as your relationship to the family business, your actual interest in the business, as well as terms of the sale of your interest back to your family.
Since it is apparent you are making very significant changes and decisions, it is well advised to consult with an attorney individually to help answer your questions. A knowledgeable attorney will review all of the relevant documentation that is specific to this situation, and advise as to your options moving forward.
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